Policy Entrepreneurs: The Power of Audacity

Bruce Levinson | 05/21/13

The most powerful, influential, and creative people in any society are its
entrepreneurs. Entrepreneurial endeavors span every field of human
enterprise: commerce, academia, the arts, and, yes, even the career
civil service.

The power of civil service entrepreneurship was beautifully
illustrated in a recent book by Ken Godwin, Scott Ainsworth and
Erik Godwin, Lobbying
and Policymaking, which shows how policy change depends on
entrepreneurship, whether from inside or outside of government.

In a recent article,
Jim Tozzi, a former official at the Office
of Information and Regulatory Affairs (OIRA), provides an accounting of the
events during the Johnson through Carter Administrations that resulted in the
founding of OIRA in 1980, a successful entrepreneurship undertaken from within
the civil service. As it happens, Tozzi is also featured in the Godwin et al.
book -- but in its discussion of the Data Quality Act (“DQA”) of 2001, an
example of civil service entrepreneurship undertaken from outside the
government.

Whether entrepreneurship takes place inside or outside of
government, Tozzi’s article and his work on the DQA provide exceptional support
for Godwin’s finding that the “entrepreneur has extensive knowledge not only of
the issue but also of the policy process.”

Godwin et al. provide new policymaking insights through
their analysis of the DQA. Of particular note, they highlight functional
differences – in scope, strategies, and funding – between how ordinary
lobbyists and policy entrepreneurs approach the policy process.

With respect to scope, the authors note that lobbyists
typically focus “on obtaining goods” for their clients, while policy
entrepreneurs often choose a more expansive canvas for their work.
Entrepreneurial audacity was on display with the DQA, which Godwin et al.
describe as “a radical change in regulatory policymaking” and “one of the most
significant regulatory reforms over the past twenty-five years.” They say
the DQA “changed the balance of power” in regulatory circles.

Given the broad applicability of the DQA, it’s not
surprising that one of the most notable DQA victories was initiated by an
environmental organization. Public Employees for Environmental
Responsibility (PEER) used the DQA to change
the Fish
and Wildlife Service’s (FWS) determination of the habitat needed by the
Florida panther. PEER’s successful use of the DQA was particularly remarkable
because the group’s Request for Correction was signed by a former FWS scientist
who had worked on the panther issue and was subsequently fired. Thus, DQA
empowered citizens in a novel and, perhaps, unforeseen way.

A lobbyist’s coalition-based legislative strategy can be
very different from that of a policy entrepreneur’s low-drag approach. Godwin
et al. describe the strategy for passing DQA by stating that the push to
establish the law had “no visibility, no competition, no bargaining, and
parties and elections were unimportant to [its] passage.”

Ironically, lobbyists who undertake broad,
politically-attuned strategies still often yield results which benefit a few,
while the narrow, even quieter, approach of the entrepreneur can result in a
high-impact tool that can be used by everybody. In the case of the DQA,
even the legislators who voted for it have used the law. Among the first
Requests for Correction filed under the DQA was a petition to the Environmental
Protection Agency (EPA) signed
by four Senators.

Unlike lobbying undertaken by coalitions with significant
financial resources, policy entrepreneurs may not have any funding model at
all. Godwin et al. states that “[i]nterviews with individuals who are familiar
with the development of the DQA indicate that Tozzi was not paid by any of his
clients to develop the amendment.”

Godwin et al. do explain that “Tozzi was in close contact
with his clients and solicited their advice concerning how the amendment should
be phrased.” They acknowledge, too, that the “DQA has provided
substantial work for Tozzi’s lobbying firm.” Thus, the authors raise an
interesting question: if Tozzi had been paid for the DQA, with the associated
need for external sign-offs on key decisions, would the DQA have been enacted?

Godwin et al.’s book offers insights into why the
initiative to create the DQA was undertaken in the first place.
Regulatory policies at EPA and the Food
and Drug Administration (FDA) assigned radically different weights to
evidence based on who submitted it, rather than on the quality of the data
submitted. These asymmetric data policies were biased against industry. Godwin
et al. discuss how the FDA’s drug registration process placed far more
expansive and expensive data requirements on a pharmaceutical firm seeking
approval for a substance than on a researcher seeking to prevent the product’s
approval.

Godwin et al. further explains that FDA was not the only
agency weighing data based on the type of submitter rather than the quality of
the data submitted. They point to EPA’s pesticide registration process as
another example of a situation where industry believed that regulatory agencies
had a “double standard that punished producers.” The authors describe the
DQA’s impetus by stating that Tozzi “decided to eliminate this perceived double
standard.”

A new National Academy of Sciences (“NAS”) study
confirms the DQA’s impact, noting that “all federal agencies are expected to
comply” with the Office of Management and Budget’s DQA guidelines.
Moreover, the NAS recommended that “agencies should, at a minimum, subject all
information to a review based on OMB criteria of “objectivity, utility and
integrity.”

The financial rewards from entrepreneurship can be
tremendous. Wealth generation, however, is not the aspiration of many
entrepreneurs. Some entrepreneurs, such as Bill Gates, have turned
from business to the distinct challenges of social entrepreneurship.
Others, such as
Mark Zuckerberg, engage in
multiple facets of entrepreneurship simultaneously. Many, many other successful
entrepreneurs never pursue wealth at all. As Tozzi explains, for a social
entrepreneur “the payoff is in terms of improving the functioning of government–
not a hundred-foot yacht."

Bruce Levinson is Senior Vice President – Regulatory
Intervention at The Center
for Regulatory Effectiveness. He provided assistance in the
preparation of the Administrative Law Review article discussed in this
post and has been involved in numerous DQA-related activities at the Center for
Regulatory Effectiveness.